The UK has finalised a landmark trade agreement with the United States that removes all tariffs on British pharmaceutical exports for at least three years, making the UK the only country to secure a 0% tariff rate for medicines entering the US market.
The deal, part of the UK-US Economic Prosperity Deal, is expected to safeguard supply chains, accelerate patient access to new treatments and drive substantial investment into UK manufacturing and R&D.
The deal comes after President Trump threatened to raise tariffs to as high as 100% on branded drug imports.
The government said the agreement will benefit tens of thousands of NHS patients by improving access to new drugs and strengthening the resilience of the medicines supply chain.
Preferential terms for UK medtech exports have also been secured, preventing new tariffs and supporting further sector growth.
The tariff-free arrangement aims to reinforce the UK’s attractiveness as a destination for global biopharmaceutical investment.
Companies including Moderna, Bristol Myers Squibb and BioNTech have already announced multibillion-pound commitments.
Bristol Myers Squibb said it expects to invest more than $500m in UK research, development and manufacturing during the next five years.
"Based on the UK commitments and increased investment in innovative medicines underpinning this agreement, BMS anticipates being able to invest upwards of $500m over the next 5 years," said Bristol Myers Squibb Board Chair and CEO, Chris Boerner.
"This investment will come across multiple areas of the business, including research, development and manufacturing."
"This agreement is a sign of progress and one that creates an environment conducive to our continued presence in the UK."
Alongside the trade measures, the government will increase spending on innovative medicines by around 25% — the first major uplift in more than two decades.
NICE will be able to approve high-impact treatments that may previously have been rejected on strict cost-effectiveness grounds, including drugs for cancer and rare diseases.
Updated assessment methods and higher cost-effectiveness thresholds are intended to support earlier launches in the UK and maintain the country’s status as a preferred market for clinical development.
The deal follows recent reforms to halve clinical trial approval times and sits within the government’s broader Life Sciences Sector Plan.
Sector bodies, including the ABPI and the Academy of Medical Sciences, welcomed the move as a positive step toward improving patient access and strengthening the UK’s competitiveness in drug development and advanced manufacturing.